MONEY: Avoid Scams, Avoid These Six Mistakes in Crypto

Must-read if you’re new to bitcoin and other cryptocurrency investments! As much as this market could be a lucrative business or good source of passive income, it’s also prone to fraudsters who take advantage of newbies and the demand for outsourced services.

This is the case for any other money-related venture, anyway. That’s why it’s important to be vigilant and learn from lessons. I surely did and I’d like you to learn from my mistakes, too, so you wouldn’t have to make them and lose money!

So without further ado, watch out for these mistakes!


1. Trusting a Middleman

You do not need a middle person to invest or make money in or with bitcoin or any other cryptocurrency. The two most common and legitimate ways to generate income through crypto like BTC and ETH are trading and holding. Crypto trading is a legitimate business in the Philippines. Good news is you can do it on your own. All you need is a reputable cryptocurrency exchange, and/or cryptocurrency wallet – both of which enable you to buy, sell, and hold your crypto on your own.

If someone invites you to “invest” in crypto and asks for money, DO NOT FALL FOR IT.

Once you’ve found your choice/s of exchange platform and wallet, download the mobile app of that exchange. I use OKEx app and do all my tradings there. This helps you avoid phishing scams, which is number 4 in this list.

Mining is another way to make a business out of crypto but one that requires expensive hardware. But once you have the machine set-up, the mining process, likewise, is something you can do on your own.


2. Cloud Mining

The idea of cloud mining is buying a “mining package” from an individual or entity that does the actual mining. They are called cloud mining providers and they are supposed to make your money work for you including doing the operation and maintenance of mining machines.

This sounds good in theory, with you just putting in money as “investment,” in exchange for regular “payouts” in the form of crypto. Getting paid in bitcoin just by buying a package? Tempting right? I once fell for this. That’s my very first bitcoin investment and I didn’t have enough knowledge of the market. I was ready to lose my money, and I did. NOW DON’T LOSE YOURS.

Mining business is very unstable as difficulty comes up and new equipment comes out. Because of this, a lot of cloud mining providers easily go out of business, cannot provide promised payouts, closes and/or runs away.


3. Releasing Crypto Even Without Payment Confirmation in P2P

During my first few days of Peer-to-peer (P2P) trading, I lost money, too. 😑 I was busy doing other work when I was notified that someone wanted to buy Php5,000 worth of Tether (USDT) from me on the exchange. The buyer had also marked the order paid. I checked my bank account multiple times and PAYMENT WAS NOT THERE.

Buyer kept bugging me to release the crypto to his account, with a screenshot of supposed transfer. Buyer said, it’s “overseas bank transfer” so might take a few days. The noob in me wanted him out of my hair and I RELEASED THE CRYPTO.

Wrong move.

Do not fall for that. Do not accept overseas transfer. Accept only instant transfers so you could see and confirm right away if payment was made.

For this experience, I never received the payment. Additionally…

Fake screenshots of payment is also a common scam. Remember, you have to see with your own eyes that money is in your account be it in your bank account, GCash, Coinsph or Paymaya. You see P2P provides a lot of freedom when it comes to buying crypto with fiat (PHP, USD, or other traditional money), but this freedom also includes the system counting on you to confirm payments and manually releasing the crypto you are selling.

On the other hand, if you are the one buying crypto on P2P exchange, you get more protection as the platform like OKEx holds the crypto in an escrow in your behalf, ready to be released if ever the seller refuses to, despite confirmed payment.


4. Unmindful Fingers Get Phished

I’m sure you’ve been a target of phishing scams in a lot ways before. This cybercrime tricks the victim into giving out personal information like account numbers and passwords. Be careful what you click and what you fill up!

Phishing websites trick you into believing you are in the right website. To avoid this, I don’t do my trades on the browser, I do them on the mobile app so I’m sure that I’m definitely on the legitimate site. I also don’t click on any other “crypto links,” unless it’s an article from my trusted blog and news sites for educational purpose.

Don’t have crazy fingers. Be aware where you click and what you typeBut you can click on my link so you can also use my trusted exchange with freebies OKEx.


5. Talking to Telegram Strangers

Telegram has a very active community of crypto aficionados. A lot of them legit, but a lot are also looking for opportunities to make dirty deals aka SCAMS. 

Do not respond. It’s the same as, don’t talk to strangers.

A friend whom we’d call Chris for this article was new to a Telegram crypto community. One day, he receives a message from someone whose username looks like it was customer service representative of OKEx (Chris is also using OKEx exchange).

The name is something like OKEx At Your Service. Chris being new and still naive decides to consult with this Telegram user, almost giving away his crypto password!!

That story did not end very badly, thanks to Chris’ memory gap. He could not remember his password and therefore scammer’s scamming plans were spoiled. How Chris recovered his password, that’s another story.

Never give out your password!! There is no reason that you would need to give your crypto wallet or exchange password to anyone.


6. Bothering With Trading Bots

Trading bots are offered everywhere for the purpose of automating your crypto trading for you. These programs promise to do a a model investors’ work like market data analysis, risk prediction and the actual buying and selling of crypto assets. But like cloud mining, providers of trading bots can easily run with your money. It’s hard to see proof that one would be capable of providing these “trading bot” services.


On top of that, YOU RISK ENTRUSTING YOUR ASSETS TO A MIDDLEMAN. Go back to Mistake #1 .

There you have it. Cryptocurrency itself is not a scam. But just like any other business, scammers abound so be mindful and hold your own crypto!